CONNING RESEARCH & CONSULTING; Conning Research: Short Term Challenges Still the Focus for Life Insurers After $51 Billion Loss in 2008



The life-annuity industry is still struggling to shake off the impact of the financial crisis of 2008 and the resulting significant decreases in assets and surplus, according to a new report by Conning Research and Consulting.

"Preliminary results for 2008 indicate that the life insurance industry had a statutory net loss of $51 billion, and that ending surplus plus AVR dropped 13 percent to $273 billion," said Terence Martin, analyst at Conning Research & Consulting. "Our latest forecast for the life-annuity industry projects net operating gain to recover, but realized and unrealized capital losses will continue to challenge the industry at least through 2009. While the industry will show a net statutory operating gain in 2009, it will be far below the robust levels of 2003 through 2007."

Conning's semi-annual "Life-Annuity Forecast & Analysis by Line of Business" offers the most comprehensive and up-to-date industry forecast and commentary for key lines of business and the industry as a whole.

"Despite possible negative short term impacts from some of the issues looming over the industry -- such as the need to rebuild capital and changing regulations -- our longer term view of the life insurance industry is favorable," said Stephan Christiansen, director of research at Conning. "We project that surplus plus AVR will increase 23 percent to $337 billion by 2011 as the industry adapts to the new environment and due in part to additional capital paid in to the industry. Additionally, we forecast premium growth through 2011 based in part on demand stimulated by estate planning, a focus on savings and more conservative protection needs, and by a need for more stable investment alternatives."


"Life-Annuity Forecast & Analysis: Midyear 2009" is available by subscription from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company's web site at www.conningresearch.com.

About Conning Research & Consulting

Conning Research & Consulting provides insurance industry analysis to insurers and industry stakeholders. Its published research includes market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. The Conning name has represented excellence in independent insurance industry research for 50 years. Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning is headquartered in Hartford, CT.

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